China Power Equipment’s New Plant Triples Capacity for Transformer Cores

July 16, 2010

XI’AN, China, July 16 /PRNewswire-Asia-FirstCall/ — China Power Equipment,
Inc. (“China Power Equipment” or “China Power” or the “Company”)
(OTC Bulletin Board: CPQQ), the manufacturer of a new generation of energy
saving electric transformers and transformer cores in the People’s Republic of
China, today reported that it is now running regular production at its new
plant that manufactures amorphous alloy transformer cores. The new plant is
located in the new Xi’an Jingwei Industrial Zone in Jingyang near Xi’an.

Mr.
Yongxing (Henry) Song, Chairman and Chief Executive Officer of
China
Power, said, “We have passed all government safety inspections and have
completed our pre-production testing of our new production line. As a result,
we have started our regular production and are delivering our high-quality
amorphous alloy transformer cores to our customers from the new plant.

“Because we have created the optimum balance between industrial automation
and hand work, the new plant is yielding high product quality, high production
efficiency, and should result in lower production costs per unit.”

“Demand for amorphous alloy transformer products in China continues to
increase rapidly as a result of the government’s determination to increase
energy efficiency and reduce emissions. Our new plant further qualifies
China
Power as a reliable high-volume supplier of high-quality amorphous alloy cores.
We believe the demand for our additional capacity is real and look forward to
higher sales volumes.”

With a total internal capacity of 6,500 metric tons each year, China Power
Equipment has become the number 2 amorphous alloy core supplier in the market,
measured by the annual production capacity for amorphous alloy transformer
cores.

The new plant is a state-of-the-art facility that uses modular
programmable logic controller technology, human-machine interface engineering,
highly precise mechanical transmission systems, and other advanced
technologies. The production phase in which the delicate amorphous alloy strip
is cut in an extended sequence of longer and longer precision lengths is
highly automated, reliable, and very productive.

The dipping phase in core production uses a new automated system that
increases production efficiency. A new annealing process for cores that is
computer-controlled dramatically reduces the energy consumed in the process
and shortens the time required for the annealed cores to cool before they
continue down the production line.

The new plant adds 5,000 metric tons of annual capacity for amorphous
alloy cores, bringing
China Power’s total internal capacity to 6,500 metric
tons per year, up 333% from its previous internal capacity of 1,500 metric
tons per year. To help fill orders in the last year or so, the Company had
used an additional dedicated capacity of 1,000 metric tons that was provided
by an associated manufacturer, which
China Power may use again, depending on
how rapidly the demand increases for amorphous alloy cores.

The Company continues to produce and deliver cores from its original plant
in Xi’an and will gradually shift production to the new plant without any
interruption in deliveries to its customers.

About China Power Equipment, Inc.

China Power Equipment, Inc., is a U.S. corporation, which through its
wholly-owned subsidiary, An Sen (Xi’an) Power Science & Technology Co., Ltd.,
and its affiliated operating company, Xi’an Amorphous Zhongxi Co., Ltd.,
designs, manufactures, and distributes amorphous alloy transformer cores and
amorphous alloy core electricity transformers in the People’s Republic of
China. The company currently manufactures 59 different products, primarily
amorphous alloy cores and amorphous alloy core transformers.

China is aggressively embracing energy efficiency. China Power Equipment’s
products are a new generation of energy-saving electricity transformers that
typically step-down voltage from 10,000 volts (used in local electric
distribution) to 220 volts (the household voltage in China). As the China
Power Equipment cores or transformers operate, they typically use 60 to 70
percent less electricity than older steel-core transformers.

Safe harbor statement

Certain statements in this release concerning our future growth prospects
are forward-looking statements, which involve a number of risks and
uncertainties that could cause actual results to differ materially from those
in such forward-looking statements.

The risks and uncertainties relating to these statements include, but are
not limited to, risks and uncertainties regarding the success of our
investments, risks and uncertainties regarding fluctuations in earnings, our
ability to sustain our previous levels of profitability including on account
of our ability to manage growth, intense competition, wage increases in China,
our ability to attract and retain highly skilled professionals, time and cost
overruns on fixed-price, fixed-time frame contracts, client concentration, our
ability to successfully complete and integrate potential acquisitions,
withdrawal of governmental fiscal incentives, political instability and
regional conflicts, and legal restrictions on raising capital or acquiring
companies outside China.

Additional risks that could affect our future results are described in our
filings with United States Securities and Exchange Commission. These filings
are available at www.sec.gov and at our website athttp://www.chinapower-equipment.com.

We may, from time to time, make additional written and oral forward-
looking statements, including statements contained in our filings with the
Securities and Exchange Commission and our reports to shareholders. We do not
undertake any obligation to update any forward-looking statement that may be
made from time to time by or on our behalf except as required by law.